The Agricultural Bank of Namibia (Agribank) has set in motion a lending facility that gives cash to women and the youth who are unemployed but want to venture into the agricultural sector.
The ‘cash flow’ lending facility which is under the Women and Youth loan scheme, was developed with distinct requirements to benefit women, youth, and agricultural professionals.
“As a short-term loan, the cash flow lending facility requires no collateral for clients who do not have fixed properties or have limited collateral scope on their fixed properties.
“In addition, the special option was designed to address the barrier of limited access to finance due to lack of ownership of fixed properties to offer as collateral, especially among the unemployed members of the community,” says Mr Fillemon Nangonya, Agribank’s public relations officer.
Nangonya states further that even women and youth who have fixed properties, they are also faced with the barrier of limited collateral scope on their properties, hence experiencing difficulties to access finance.
“Therefore, in addressing the above challenges, the Bank has a cash flow lending option under the Women and Youth loan scheme. Clients applying under this option are required to provide a valid off-take or supply agreement based on the project’s cash-flow projections.
“This agreement is a commitment between the farmer (who is the producer) and an off-taker (who is the buyer of the produce) whereby the farmer commits to supply the produce and the off-taker pledges to buy the produce from the farm.”
To ensure that an off-taker (buyer) is legitimate, the Bank conducts a due diligence check on the off-taker prior to loan approval.
“Once funding is approved, a tripartite agreement is signed between the client, Agribank and the off-taker (buyer). Through the tripartite agreement, the off-taker (buyer), when purchasing from the farmer, agrees to first pay the loan instalment amount to Agribank and then pay the difference to the farmer,” Nangonya explains.
“Thus, public members especially the target market (women, youth, agricultural professionals), who are interested and eager to start or expand their agricultural projects are encouraged to approach the Bank for funding. Visit the nearest Agribank offices countrywide for further clarification on the cash flow lending option.”
Nangonya further adds that as a state-owned development finance institution, Agribank will continue to play a meaningful role in ensuring that both communal and commercial farmers have affordable “access to financing, to transform the agricultural sector to optimum and sustainable productive status for prosperity.”
In the photo: More and more young women are entering the livestock farming sector as commercial farmers.